House Republicans unveiled a budget road map Tuesday that lays the groundwork for a tax code rewrite, shifting focus from the Senate’s stalled effort to repeal and replace Obamacare and setting up another intraparty battle with conservative lawmakers.
The budget blueprint calls for an increase in military spending, reshaping Medicare into a voucherlike program, and cutting money set aside for food stamps and other social programs.
The measure instructs 11 House committees to come up with $203 billion in mandatory spending reductions and calls on the tax-writing Ways and Means Committee to produce deficit-neutral tax reform “that will reduce tax rates and simplify the tax code to boost economic growth.”
Rep. Kevin Brady, Texas Republican and chairman of House Ways and Means Committee, called the plan a “crucial vehicle that will drive permanent, pro-growth tax reform over the finish line this year.”
“This budget resolution gives us the green light to move forward with tax reform legislation that will improve the lives of workers, families and job creators for generations to come,” Mr. Brady said.
Conservative lawmakers are calling for deeper spending cuts and more clarity on the tax plan. They also are at odds with Mr. Trump’s promise not to cut Medicare.
But in order to stave off the threat of a Democrat-led filibuster in the Senate, House Republicans must first pass the nonbinding budget resolution they released Tuesday to unlock a procedural tool known as reconciliation that clears the way for a party-line vote on a tax reform package.
“In past years, the budget has only been a vision, but now, with the Republican Congress and a Republican White House, this budget is a plan for action,” Rep. Diane Black, Tennessee Republican, told reporters on Capitol Hill. “With deficits starting to rise again and our national debt becoming unsustainable, the status quo is no longer acceptable.”
Mr. Trump also has said that lawmakers would not be able to address his plan for massive individual and corporate tax cuts until Republican-led health care legislation is approved.
But the White House said Mr. Trump is forging ahead with a tax reform plan despite the health care setback in the Senate.
“We’re still very focused on moving forward on tax reform,” said White House deputy press secretary Sarah Huckabee Sanders. “It’s still a big priority for the administration. That certainly has not changed. We want to get the biggest tax reform plan as possible in place.”
She said the administration will pursue a tax reform package and another health care bill on dual tracks and still hopes to create more budget space for tax cuts by completing an Obamacare repeal first.
“We’re going to continue pushing forward on tax reform and laying out that plan,” Mrs. Sanders said. “I know this will surprise a lot of people, but we can walk and chew gum at the same time. We’re not done with the health care battle. We’re going to continue pushing forward on that and hopefully get that completed and then transition fully to tax reform after that.”
Michael Farr, president of Farr, Miller & Washington, said on CNBC that Wall Street is watching and predicted that the markets would “stabilize and go higher” if Congress enacts tax reform.
However, he warned, “If not, then I think a tantrum is in the offing.”
The House Budget Committee is expected to take up the proposal Wednesday, but it remains to be seen whether Republicans have the 218 votes needed to pass it out of the House, where conservatives want more spending cuts and moderates are concerned that the reductions run too deep.
“There are not the votes to pass it,” said Rep. Mark Meadows, North Carolina Republican and head of the House Freedom Caucus, which is calling for more fiscal restraint.
The conservative group wants at least $400 billion in mandatory spending cuts spread over the next 10 years and more details about the tax plan that House Republican leaders are working on.
“Tell us exactly what we are aiming at,” Rep. Dave Brat of Virginia, a member of the Freedom Caucus, told The Washington Times. “What does the big tax package look like?”
Mr. Brat and Mr. Meadows said they are optimistic that Republicans will have an easier time finding common ground on tax cuts than they did trying to reach an agreement on dismantling Obamacare.
“I think there is a lot more agreement on tax reform than there is on the complexities of health care,” Mr. Meadows said. “One, what you are doing is affecting their pocketbook, but the other, there are far-reaching implications whenever you deal with health care that certainly go well beyond the numbers.”
The House budget plan calls for $621.5 billion in defense spending in fiscal year 2018 and $511 billion in nondefense discretionary programs.
The House estimates that the package will increase annual economic growth to 2.6 percent over the next decade, which is higher than estimates from the Congressional Budget Office. It also claims to reduce deficits by $6.5 trillion over the next decade and generate a $9 billion surplus in 2027.
Democrats called the Republicans’ budget outline a giveaway to billionaires.
“House Republicans have devised a toxic budget whose sole purpose is to hand tax breaks to billionaires on the backs of seniors and hardworking Americans,” said House Minority Leader Nancy Pelosi, California Democrat. “Instead of investing in good-paying jobs, the Republican budget would stack the deck even further against working families.
Rep. Seth Moulton, Massachusetts Democrat and member of the Budget Committee, told The Times that the proposal will not get a single Democratic vote.
“Just as they are trying to pull people off health care and failing at that effort, they are also trying to take away programs that people have relied on for a long time, and this is not a time in our country when we can abandon people and not give them the proper care that they need,” he said.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said the proposal is not perfect but praised Republicans for pushing toward a balanced budget.
“We are pleased and relieved that the budget prohibits deficit-financed tax cuts and provides for a down payment in real deficit reduction,” Ms. MacGuineas said. “This is a hopeful sign that Congress recognizes the risks of growing budget deficits and that tax reform is not being used as a veil for tax cuts that add to the debt.”
The Center on Budget and Policy Priorities, meanwhile, said the proposal would lead to $4.4 trillion in cuts to entitlement programs such as Medicare and Medicaid, making it “harder for millions of Americans to afford food, housing, health care and a college education.”
⦁ Dave Boyer contributed to this report.
• Seth McLaughlin can be reached at smclaughlin@washingtontimes.com.
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